Define the Future State with Business Model Canvas (Maurizio Garofalo) - Happy Hour Roma

Define the Future State with Business Model Canvas

Maurizio Garofalo – IIBA Italy Chapter

IIBA Italy Chapter - “Happy Hour Series” – Rome Branch

2

Business Model Canvas

Define the Future State with Business Model Canvas

Def_Business Model Canvas

A business model canvas describes how an enterprise creates, delivers, andcaptures value for and from its customers.

- BABOK Guide v3 -

A BUSINESS MODEL CANVAS is a tool to describe, analyze and design Business Models.Business model can best be described through NINE BASIC BUILDING BLOCKS that show the logic of how a company intends to make money. The nine elements are mapped on four main business areas: customers, supply, infrastructure and financial strength.Then a Business Model is like a blueprint for a strategy to be implemented, through a plan of evolution of its organizational structure, processes and systems: the BUSINESS PLAN

Source BABOK® Guide – Version 3.0 - IIBA Italy Chapter elaboration

3Define the Future State with Business Model Canvas

Business Model Canvas vs BABOK

• It is a widely used and effective framework that can be used to understand and optimize business models.

• It is simple to use and easy to understand.

• Does not account for alternative measures of value such as social and environmental impacts.

• The primary focus on value propositions does not provide a holistic insight for business strategy.

• Does not include the strategic purpose of the enterprise within the canvas.

A business model canvas can be used as a DIAGNOSTIC and PLANNING tool regarding strategy and initiatives.

• As a DIAGNOSTIC TOOL, the various elements of the canvas are used as a lens into the current state of the business, especially with regards to the relative amounts of energy, time, and resources the organization is currently investing in various areas.

• As a PLANNING TOOL, the canvas can be used as a guideline and framework for understanding inter-dependencies and priorities among groups and initiatives

Source BABOK® Guide – Version 3.0 - IIBA Italy Chapter elaboration


(Business Model) Canvas

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions

Customer Relationship

Channels

The different groups of people or organizations an enterprise aims to reach and serve

The bundle of products and services that create value for a specific Customer Segment

How a company communicates with and reaches its Customer Segments to deliver a Value Proposition

The types of relationships a company establishes with specific Customer Segments

The cash a company generates from each Customer Segment

The network of suppliers and partners that make the business model work

All costs incurred to operate a business model

The most important things a company must do to make its business model work

The most important assets required to make a business model work

Key Resources

Cost Structure

Revenue Stream

Channels

Source Business Model Generation - IIBA Italy Chapter elaboration


Customer Segments

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels

The different groups of people or organizations an enterprise aims to reach and serve

L’insieme di prodoti e servizi che creano valore per uno specifico segmento di clientela

La rete di fornitori e partner che permette al modello di business di funzionare

Tutti i costi che si devono sostenere per far funzionare un modello di business

I beni più importanti necessari affinché un modello di business funzioni

Key Resources

Cost Structure

Revenue Stream

Channels

In order to better satisfy customers, a company may group them into distinct segments with common needs, common behaviors,or other attributes

Customer groups represent separate SEGMENTS IF:• Their needs require and justify a DISTINCT OFFER• They are reached through DIFFERENT DISTRIBUTION

CHANNELS• They require DIFFERENT TYPES OF RELATIONSHIPS• They have substantially DIFFERENT PROFITABILITIES• They are willing to pay for DIFFERENT ASPECTS OF THE

OFFER

What to do: 1. Describe the customers 2. Divide them into segments 3. Understand their needs, for what they are paying

For whom are we creating value?Who are our most important customers?



Value Propositions

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels

I diversi gruppi di persone o organizzazioni che un’azienda desidera raggiungere o servire

The bundle of products and services that create value for a specific Customer Segment


Key Resources

Cost Structure

Revenue Stream

Channels

What to do: 1. Describe the values 2. Divide the values into classes 3. Associate values to the customer segments

The Value Proposition is the reason why customers turn to one company over another

Each Value Proposition consists of a selected bundle of products and/or services that caters to the requirements of a specific Customer Segment

Values may be QUANTITATIVE (e.g. price, speed of service) or QUALITATIVE (e.g. design, customer experience).

What value do we deliver to the customer?

What bundles of products and services are we offering to each Customer Segment?



Channels

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels

How a company communicates with and reaches its Customer Segments to deliver a Value Proposition



Key Resources

Cost Structure

Revenue Stream

Channels

What to do: 1. Sort channels2. Follow the purchase lifecycle3. Associating channels to the customer segments

Communication, distribution, and sales Channels comprise a company's interface with customers. Channels are customer touchpoints that play an important role in the customer experience.

We can distinguish:• between DIRECT Channels and INDIRECT ones• between OWNED Channels and PARTNER Channels.

Through which Channels do our Customer Segments want to be reached?Which ones work best?How are we integrating them with customer routines?




Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels

Il modo in cui un’azienda comunica con i propri segmenti di clientela e li raggiunge per portare loro il valore offerto

The types of relationships a company establishes with specific Customer Segments



Key Resources

Cost Structure

Revenue Stream

Channels

What to do: 1. Focus on the customer experience2. To develop the image of the company towards our client3. Maximize the effectiveness of the relationship

Customer relationships may be driven by the following motivations:• CUSTOMER ACQUISITION• CUSTOMER RETENTION• BOOSTING SALES (UPSELLING)In the early days Customer Relationships are driven by aggressive acquisition strategies. When the market became saturated, operators switched to focusing on customer retention and increasing average revenue per customer.

What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established?



Revenue Stream

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels


I tipi di relazione che un’azienda stabilisce con uno specifico segmento clientela

The cash a company generates from each Customer Segment



Le cose più importanti che un’azienda deve fare perché il suo modello di business funzioniKey Resources

Cost Structure

Revenue Stream

Channels

What to do: 1. Define how customers pay2. Define to what they are willing to pay3. Define the price setting mechanism

We can generate one or more Revenue Streams from each Customer Segment.

Each Revenue Stream may have different pricing mechanisms, such as fixed list prices, bargaining, auctioning, market dependent, volume dependent, or yield management.

A business model can involve two different types of Revenue Streams:• TRANSACTION REVENUES resulting from one-time

customer payments• RECURRING REVENUES

For what value are our customers really willing to pay?

For what do they currently pay?

How much does each Revenue Stream contribute to overall revenues?



Key Resources

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels

Il modo in cui un’azienda comunica con i propri segmenti di clientela e li raggiunge per portare loro il valore offerto


The most important assets required to make a business model work

Key Resources

Cost Structure

Revenue Stream

Channels

What to do: 1. List the key resources2. Relate them with the right quadrant elements of the canvas

Key Resources can be categorized as follows:• PHYSICAL RESOURCES (buildings, vehicles, systems,…)• INTELLECTUAL RESOURCES (brands, proprietary,

knowledge, patents and copyrights)• HUMAN RESOURCES • FINANCIAL RESOURCES (cash, lines of credit, or a stock

option)

What Key Resources do our Value Propositions require?Our Distribution Channels?

Customer Relationships?Revenue Streams?



Key Activities

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels



The most important things a company must do to make its business model work


Key Resources

Cost Structure

Revenue Stream

Channels

What to do: 1. List the key activities2. Relate them with the right quadrant elements of the canvas

Key Activities can be categorized as follows:• PRODUCTION (designing, making, and delivering a product)• PROBLEM SOLVING (new solutions to individual customer problems)• PLATFORM/NETWORK (Networks, matchmaking platforms, software, and even brands)

What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?



Key Partners

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels

The network of suppliers and partners that make the business model work


Key Resources

Cost Structure

Revenue Stream

Channels

What to do: 1. Think about partnerships to cut costs or risks2. Entering special suppliers3. Enter strategic alliances

We can create alliances to optimize our business models, reduce risk, oracquire resources.

We can distinguish between four different types of partnerships:• STRATEGIC ALLIANCES between non-competitors• COOPETITION: strategic partnerships between competitors• JOINT VENTURES to develop new businesses• BUYER-SUPPLIER RELATIONSHIPS to assure reliable supplies

Who are our Key Partners? Who are our key Suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?



Cost Structure

Key Partners

Key Activities

Key Resources

Cost Structure

Revenue Stream

Customer Segments

Value Propositions


Channels


L’insieme di prodoti e servizi che creano valore per uno specifico segmento di clientela


Il denaro che un’azienda ricava da ciascun segmento di clientela (i costi vanno sottratti ai ricavi per creare guadagni)


All costs incurred to operate a business model

Le cose più importanti che un’azienda deve fare perché il suo modello di business funzioniKey Resources

Cost Structure

Revenue Stream

Channels

What to do: 1. List the costs2. Distinguish between fixed costs and variable

costs

We can distinguish between two broad classes of business model Cost Structures:• COST-DRIVEN (focus on minimizing costs wherever possible)• VALUE-DRIVEN (focus on value creation)

Cost Structures can have the following characteristics:• FIXED COSTS (despite the volume of goods or services

produced)• VARIABLE COSTS (proportionally with the volume of goods or

services produced)• ECONOMIES OF SCALE (Cost advantages that a business

enjoys as its output expands)• ECONOMIES OF SCOPE (Cost advantages that a business

enjoys due to a larger scope of operations)

What are the most important costs inherent in our business model?

Which Key Resources are most expensive?

Which Key Activities are most expensive?



The BUSINESS MODEL ENVIRONMENThelps you understand the context in which you create.

The BUSINESS MODEL CANVAS helps you create value for your business.

The VALUE PROPOSITION CANVAS helps you create value for your customer.


Zooming the Business Model Canvas


Business Model Environment

SUPPLIERS AND OTHER VALUECHAIN ACTORS

STAKEHOLDERS

INCUMBENTS

INSURGENTS

SUBSTITUTE PRODUCTSAND SERVICES

TECHNOLOGY TRENDS

REGULATORY TRENDS

SOCIOECONOMIC TRENDS

SOCIETAL AND CULTURAL TRENDS

INDUSTRY FORCES

KEY TRENDS

GLOBAL MARKET CONDITIONS

CAPITAL MARKETS COMMODITIES AND OTHER RESOURCES

ECONOMIC INFRASTRUCTURE

MACRO-ECONOMIC

FORCES

MARKET FORCES

MARKET SEGMENTS

MARKET ISSUES

SWITCHING COSTS

REVENUE ATTRACTIVENESS



FIT

VALUE MAP CUSTOMER PROFILE

Products & ServicesThis is a list of all the Products and Services a value proposition is built around

Gain CreatorsDescribe how your products and services create customer gains

Pain RelieversDescribe how your products and services alleviate customer pains

Customer JobsDescribe what customers are trying to get done in their work and in their lives, as expressed in their own words.

Gainsdescribe the outcomes customers want to achieve orthe concrete benefits they areseeking.

Painsdescribe bad outcomes, risks, and obstacles related to customer jobs.


Value Proposition Canvas


Design Process on 5 Phases

Prepare for a successful

business model design project

SETTING THE STAGE

Create awareness of the need for a new business model,

describe the motivation behind the

project, andestablish a common

language to describe, design, and analyze

and discuss business models.

Research and analyzeelements needed for thebusiness model design

effort

IMMERSION

Immerse yourselvesin relevant

knowledge: collect information, interview

experts, study potential customers, and identify needs

andproblems.

Generate and test viable business

model options, and select the best

INQUIRY

Transform the information and ideas

from the previous phase into business

model prototypesthat can be explored

and tested. Then select the most

satisfactory business model design.

Implement thebusiness model prototype in the

field

EXECUTION

Implement the selected business

model design.

EVOLUTION

Adapt and modify thebusiness model in

response to market reaction

Set up the management structures to continuously

monitor,evaluate, and adapt

or transform your business model.

MOBILIZE UNDERSTAND DESIGN IMPLEMENT MANAGE


SCOP

EFO

CUS

DESC

RIPT

ION


OUR CONTACTS

• Join us, contact us: you can participate to our initiatives

• [email protected]

• www.italy.iiba.org

http://goo.gl/q5sYt

www.slideshare.net/IIBA-IT

https://twitter.com/iiba_italy

http://www.facebook.com/ItalyIIBA

http://goo.gl/q5sYt

http://www.slideshare.net/IIBA-IT

https://twitter.com/iiba_italy

http://www.facebook.com/ItalyIIBA

http://www.linkedin.com/



Date post:	16-Apr-2017
Category:	Business
Upload:	iiba-it
View:	89 times
Download:	0 times